Government raises P30 billion from new bond issuance

MANILA, Philippines — The government borrowed P30 billion from the domestic market via the fresh issuance of long-term securities, with the coupon rate set above secondary markets.

The Bureau of the Treasury yesterday fully awarded P30 billion for the original issue of three-year T-bonds on offer. This is the first T-bonds auction for the year.

During yesterday’s auction, the three-year T-bonds fetched an average rate of 5.9 percent, down by 2.1 basis points from the 5.921 percent BVAL Reference Rate, which is the standard for securities.

Rates went from just a low of 5.75 percent and a high of six percent. The coupon rate is set at six percent.

Nonetheless, yesterday’s average rate was significantly lower than the 6.482 percent during the last three-year T-bond auction on Sept. 26.

At the time, the government rejected all bids and did not raise P30 billion.

Demand for yesterday’s securities attracted P53.279 billion bids, oversubscribing the auction by 1.78 times.

Bids nearly doubled from the last three-year auction where offers reached only P27.643 billion.

The latest offering has a maturity date of Jan. 4, 2027.

For this month, the Treasury aims to raise P195 billion from the local debt market. Of this, P120 billion is expected to come from T-bonds.